SUMMARY: Contests are often used as a “quick fix” to grow an email list. But with a little more planning, you can design a campaign that offers more than a one-time lift, and targets quality names for your database.

Read how an ecommerce marketer established a monthly contest targeting customers with a popular product offer. The campaign has more than doubled the size of their email list in eight months – and the new names are providing better response than those from the existing database.

During summer 2008, Jason Heflin, VP E-commerce Marketing, CoolComputerBags.com, wanted to grow his house email list. But he wouldn’t settle for just any email addresses -- he needed high-quality, relevant leads.

"Being a small startup that has not been around that long, it’s really not cost effective for us to rent lists and try to build our customer base that way," Heflin says.

Heflin’s team sells computer bags from their ecommerce site. If they wanted a bigger, better house list, they were going to have to build it from scratch. But as a startup, they didn’t have funds to spare on advertising.

The team knew contests could generate a quick lift in email subscriptions. But they also knew a one-off effort might not be enough to keep their list fresh and responsive.

CAMPAIGN

The team established an ongoing, monthly computer bag giveaway in August 2008. Their strategy was to keep it as simple and as cost efficient as possible, while targeting top prospects with a relevant offer.

Here are the four steps they followed:

Step #1. Pick a popular product as the prize

CoolComputerBags.com only sells one type of item – laptop bags. Therefore, their only prospects were laptop owners interested in purchasing a new product. Anyone who enters a contest to win a computer bag is highly likely to be in their target market.

- Pick a strong seller

The team picked one of their top selling bags as the prize. A popular bag would be more likely to generate interest than a poor seller.

- Buy in bulk to lower costs

The team gave away only one type of bag, which required them to increase inventory of this product above their normal needs. Heflin also anticipated that promotions tied to the contest would increase sales for the bag, requiring an even larger inventory.

The team considered all the above factors and decided to buy in bulk approximately 30% more of the bags than usual -- which helped them earn a 10% lower per-piece rate.

Step #2. Create contest page on website

Heflin wanted the contest to be as simple as possible, for two reasons:1. He didn’t want it to occupy too much of the team’s time2. He wanted to make it simple for consumers to sign up

To enter the contest, a person had to visit the contest page on the website, enter an email address, and click a button to submit their entry. No other information was required. Winners were randomly selected on the final Friday of each month.

"I’d love to collect more data, but I’m more concerned about getting them and trying to convert them and then collecting more data," Heflin says. "When we pick the winner, we have to email them and ask what their name is."

- Contest page

The webpage for the contest had the following features:o Photo of the bago Contest ruleso Request to enter email addresso List of previous winnerso This note: "We will never share your information with anyone. And we will only contact you regarding this contest or other CoolComputerBags offers."

The page did not feature an opt-in checkbox, something that Heflin says was an oversight during a recent website redesign, but will be added soon.

As a result, the team only emailed contestants about the contest and did not add them to their general email list. This required keeping the team’s newsletter lists and contest lists separate.

Step #3. Use online promotions to attract entries

To maintain efficiency, the team did not use any paid promotion for the contest. Instead, they used three main tactics to inform consumers about the contest:

- "Free stuff" websites

Heflin’s team identified five sites that highlight giveaways and contests on the Web (see the useful links below) and promoted the contest there.

These sites let the team submit a subject line and a description of the contest. They duplicated most of the contest description from their own website. Heflin approached writing the subject line in the same manner he would write an email subject line.

"[The sites' visitors] are there to find free contests and products. I would say something like 'win a free laptop bag.' I would be very specific to say 'laptop bag' so that we pulled more targeted people than if we said 'win a free bag,'" Heflin says.

Heflin used the website Compete.com to get an estimate of each site’s traffic and determine if it was worth his time to regularly send in the contest’s information. Heflin estimates that it took about 10 minutes per month -- once all required accounts were established -- to send CoolComputerBags.com’s monthly contest to the sites.

- Homepage ad

The team placed a display ad on their homepage with an image of the bag and the following text: o "Win This Laptop Bag! Click Here to Enter Our Monthly Drawing!"

- Email to house list

The team also mentioned the contest once a month in their email newsletter, and supplied a link to the contest page. They wanted to include current customers in the effort and encourage them to pass along the email to a friend.

Step #4. Send monthly notification email to all contestants

Each month, after a winner was selected, the team sent an email to all contestants who entered.

The email had the following features:o Subject line: "Laptop Bag Contest - We Have a Winner"o A reminder that they enteredo The name of the winnero A link to enter the following month’s contesto A mention of a current sales promotiono A coupon link worth 10% off the purchase price of the featured bag

RESULTS

How does Heflin feel about the contest?

"I love it. As a marketer, you’re always trying to figure out new ways to build your list, especially in a down economy when you can’t spend as much money," he says. "And this one has been, by far, our best way of building lift."

- The team currently receives about 55% of new opt-ins per month through contest entries.

- They doubled the size of their list in approximately eight months.

- The simple format and promotion strategy requires -- at most -- 20 minutes of the team’s time per month, Heflin says.

Furthermore, the email addresses from Heflin’s contest list are better responders than the names from their existing customer database.

"We get a better clickthrough rate from those addresses," he says. This is likely because contestants are in need of a computer bag, while recent customers have had their needs met.

- Winner’s email

The email that announces the winners is a strong performer, Heflin says. o Avg. open rate: 62%o Avg. CTR: 57.3%

Surprisingly, more than half of those who open the email click through to either the contest page to sign up for the following month, or to take advantage of the 10% discount offer.

"And these are people who are still in the market for a computer bag, because they entered the contest to win."

The link to enter the upcoming contest encouraged some contestants to enter every month, Heflin says.

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